ECONOMICS OF ENGLISH COINAGE DENOMINATIONS

SAUL B. NEEDLEMAN

INTRODUCTION

English coinage was driven by the economic history of the country.
Both need and greed made this coinage at once one of the more desirable of
the European currencies during the middle ages, but also one subject to wide
fluctuations in fineness and refinement in design. The changing economic
need of the country in converting from an agricultural society to one of
industrialization, led to a coinage which was stable and highly accepted
throughout Europe, eventually influencing the early coinage of Scandinavia
and the Hanseatic and Baltic states. But the greed of the crown often
reduced the fineness of the coin almost to the point of non-acceptance within
the land itself.

The denominations of English coinage did not arise at one time. They
came into being as responses to the constantly changing picture which faced
the ruling monarch of the time. In point of fact, the various denominations
arose during three major periods: the hundred years between 1272 and 1377
marking the rise of mechanization and the costs of the French wars, the
hundred years between 1509 and 1603, during which attempts were made
to overcome the excesses of Henry VIII and the beginning of the
Commonwealth, and the close of the 18th century when earlier attempts at
an official but private copper coinage was formalized with a significant royal
copper coinage leading to the development of modern British currency.

Unlike the conquests of Spain and Gaul by a single political entity
which set up a single economic system, the conquest of England was by
many tribes over a span of many years during which different governments
and different economic systems were set up in each territory. In spite of
such diversity, the early Anglo-Saxon period was served by the styca (or
sceat) and the thrymsa. Once the penny was introduced, it supplanted these
and became the dominant stable economic unit at least until the
Commonwealth. Nevertheless, the silver content of the penny fluctuated
widely at times toward the end of the period. Gold underwent rapid
changes, once it was introduced as a medium for coinage in England. It is
remarkable that most of the denominations arose when England was already
unified and relatively stable, while the penny served as the sole economic
unit when the future England was still fragmented into independent
kingdoms, each vying for domination.

THE DENOMINATIONS

ANGLO-SAXON COINAGE

The considerable prosperity of pre-Roman Celtic Britain is illustrated
by the fact that some of the chieftains, following the example of Roman
provinces across the Channel, began to coin money. This suggested to the
Romans that, from a financial point-of-view, conquest of Britain would be
worthwhile. Other groups evidently shared this opinion in later times. The
Celtic tribes formed independent kingdoms, each with its own coinage
reflecting its own economic system. But, in time, these independent
kingdoms diverted most of their energy to becoming the dominant or sole
ruling power.

Later, following an essentially parallel path, the multiplicity of
chiefdoms in Anglo-Saxon England gradually coalesced into seven major
kingdoms (the Heptarchy). Each was headed by a king. Generally one or
another of these kings dominated as bretwalda (chief king). As was the case
in Celtic times, considerable efforts were devoted to attaining the title and
sole role of bretwalda. An independent coinage was used to mark the power
of the kingdom as it achieved a dominant status. Aethelstan I (825-840?) of
East Anglia was probably the first to include the title REX ANG(LORUM)
on his coinage.

The first indications of a native Anglo-Saxon currency supplemental
to the Roman coinage came with the Lydney Hoard of 1929 which contained
tiny copper coins, some as small as pin heads. These pieces, which could
not have been buried before 385 A.D., are barbarous imitations of the
copper coins of Constantine and were struck with dies too large for the flan.
There are occasional finds of non-Roman gold coinage - copies of the
tremissas of Constantine, and Byzantine and Merovingian currency. The
first definitive Anglo-Saxon gold coinage was the thrymsa, which circulated
for a short while before being replaced by the silver sceat. Based on the
laws of Aethelberht I of Kent (601-604), the sceat was rated at 1/20 of a
shilling. The early sceat depicted a bust of the king. Slowly the bust became
increasingly corrupt, emerging in the form of birds, which in turn converted
into shapes of less identifiable character. As the silver sceat underwent
inevitable debasement in its conversion to the base styca, the design was
replaced on some types with the mint name LUNDONIA with a variety of
moneyer names given in Runic letters.

The thrymsa was equivalent to the Merovingian tremissas of 20 grains
or 1/3 of a solidus. Later, the thrymsa was raised to a rating of a 70 grain
solidus. The sceat was rated at 20-22 grains of silver and formed the basis
of the future penny.

THE ENGLISH PENNY

The English penny had its origins in the reform Carolingian denier
established by Pepin in France. It replaced the Roman coinage which still
circulated in some parts of England, as well as the styca of early Anglo-
Saxon times. It is generally accepted that the penny was introduced in Kent,
under Offa, about 790-1, and for five centuries formed the fundamental
structure of the English economic system. Except for an occasional
emission of struck half pennies, and gold (under Offa), the penny remained
the sole denomination until the appearance of a larger silver and gold
coinage during the 13th century. Silver coins of Offa may be divided into
two major groups. The earlier group consists of small thick flans with a
weight of 16-20 grains. The newer group - the penny - was prepared on
large thin flans of 22 1/2 grain weight. The penny coinage was completely
dominated by the personality of Offa. Not only were designs and legends
dictated by the crown, but the number and location of the mints too was
carefully controlled by him. The use of the penny spread quickly through
the areas he controlled. Thus the currency of Mercia, directly under Offa's
control, as well as the currency under the kings of Kent and the archbishop
of Canterbury are all of similar style, suggesting that they were produced in
a single mint, probably Canterbury.

Invasion by the Danes in the 860 s led to generally poor economic
conditions in the Kingdom. Some debasement of the coinage took place and
coins by Burgred prior to 866 are not known. That the economic decline
continued after Alfred is shown by the many coins buried during his reign.
In spite of some instances of debasement, the penny generally was
maintained at the Anglo-Saxon standard of 92.5 percent fineness (sterling
silver) of 1/240th of a pound of 5400 grains (an average of 22 1/2 grains per
coin). There is no significant change in the standard after the Norman
conquest; the only visible change was in the name of the king. In addition
to normal variation, the actual weight of single coins depended on the length
of time the coin was in circulation (due to wear and clipping) and on the
integrity of its moneyer.

For amounts less than a penny, moneyers, or perhaps the penny owner,
divided the penny into halves and even quarters (farthing = fourth of a
thing). The cross design of the penny prevalent at the time particularly lent
itself to such actions since bending back and forth, or cutting, could be
accomplished quite easily along the cross lines. Although cutting of pennies
was prohibited in 1279, coincident with the appearance again of round half
pennies and the first regular use of round silver farthings, there is evidence
that this practice continued for many years.

RISE IN SILVER AND GOLD COINAGE

In an agricultural economic system, barter met most of the economic
needs of the population. As the economic structure of England changed into
a community consisting largely of manufacturers, merchants and
shopkeepers, a need for a denomination other than the penny became
significant. Struck silver farthings appeared in August, 1279. These heavy
pieces weighed 6.85 grains consisting of 5.55 grains of sterling silver with
1.3 grains of alloy added to make them more convenient to handle.

This farthing was replaced in 16 months by silver pieces weighing 5.51
grains, about one-quarter of the new lighter 22¬ grain penny. The
difference from the true weight of 5.55 grains covered the extra cost of
minting the small coin. These were rarely available in sufficient quantities
to meet demand because they were uneconomic to make. Farthings required
at least four times the time and labor necessary to make one penny. In
addition, they were so small that they were lost almost as fast as they were
issued. The silver half penny experiment (1280) was somewhat more
successful, continuing in an almost unbroken stream for about 400 years.
At the same time that saw the appearance of 'small change', a larger
denomination, the four penny piece called the 'groat' (from the French gros,
"large") attempted its first appearance (under Edward I).

A new feature distinguishing the coinage of 1279-1280 was the
creation of the office of Master of the Mint which united in that office the
responsibility formerly divided among the many independent moneyers. As
a result, moneyer's names disappeared from the coins to be replaced by the
addition of privy marks to identify origin and authority for each new issue.
In some cases, privy marks were changed as often as every three months.

The new coinage was marked by increased production and by the
opening of new mints to handle the increase. However, between Edward I
and Edward III, there had been a steady drain of coins from England in
exchange for foreign imitations. To curb this drain, first, the output of
coinage was greatly reduced, but with failure of this approach, between
1335-1343, what coinage was produced was of base metal. Traditionally,
the English currency had been undervalued compared with its continental
counterparts. Failure of these attempts at producing a currency on par with
Flanders contributed to the economic crisis facing Edward III. A new
approach toward stabilizing the economic picture was to introduce in
January 1344, a gold coin, a florin of six shillngs weighing 108 grains,
together with a half and quarter unit. Later in the year, however, this coin
was replaced by a larger coin of 6s 8d weighing 136.7 grains called a noble,
but a gradual reduction in the weight and fineness of gold (to 120 grains)
and silver (to 18 grains) over the next few years again reduced the integrity
of the coinage. Thus the ratio of gold to silver went from 14.8 to 1, down
to 12 to 1. For the second time, a groat of four pence and a half-groat were
added (1351) as restoration of the abortive groat of Edward I of some 70
years earlier.

After the death of Richard, the economic state of the country went
from bad to worse. As long as English currency remained undervalued in
relation to foreign coins, the land was rapidly drained of its coins and the
bullion supply remained inadequate. In 1412, new coins of gold and silver
were issued with reduced weight but retaining the old currency values. A
noble of 108 grains of gold and a penny of 15 grains of silver were put into
circulation and for the next 20 years the effect was positive, there being a
large output of coinage of both metals. Thereafter, the use of gold
diminished until very little gold coinage appeared after 1433 and almost
nothing by 1464 (Edward IV). To increase the supply of silver, the weight
of the penny was reduced to 12 grains but the currency value of the noble
was raised to 8s 4d (ratio of 11.1 to 1). Interestingly, during the reign of
Henry VI, at the height of wool export, the supply of money was at its lowest
state of production. In March, 1465, the gold coinage was cornpletely
reformed with the appearance of the ryal or rose noble weighing 120 grains
with a value of 10 shillings, with a half and quarter in proportion. To
replace the existing noble, a new gold coin called the angel was issued with
a value of 6s 8d weighing 80grains. The half unit was called the angelet.
The silver penny continued at 12 grains. By 1472, the angel had replaced
the ryal.

The coinage of Henry VII represents the first step in the transition
from medieval to modern currency. New denominations in both gold and
silver were introduced, an artistic portrait was adopted for the obverse of the
silver coinage and a new reverse was introduced featuring the royal shield.
Thus, in 1489, there appeared a new gold coin weighing 240 grains called
the sovereign with a currency value of 20s.

Henry VII accumulated an enormous wealth and it took Henry VIII
many years to squander it. Only when his resources were nearly depleted
did Henry VIII seek easy solutions to guarding English coinage against
competitive foreign currencies - the debasement of his coinage. Gold was
reduced to 0.83 fineness and silver eventually to 0.33 fineness. One major
design change was the introduction of the portcullis/rose farthing as a means
of differentiating between the farthing and the diminitive half-penny. In
1526, another attempt was made to equate the standard of the English
coinage with that of the continent. The sovereign was reduced to 22
shillings and a new coin, the crown of the rose, was released with a value of
4s 6d, at the weight and standard of the French cu au soleil. This issue
lasted no longer than 3-4 months and, in the following reign, this
denomination was converted to a silver coin. Now new denominations,
representing attempts at stabilizing the value of the currency, poured forth
with regularity. The sovereign was valued at 22s 6d, the angel at 7s 6d and
another new coin, the george noble (71 1/9 grains) was valued at 6s 8d.
Each of these was of standard gold (23 ct 3 1/2 grains). Another new issue,
the crown of the double rose (and its half) was valued at 5s but was of crown
gold (22 ct). The penny was reduced to its lowest weight ever of 10 2/3
grains. Between 1545 and 1553, constant adjustments in all denominations
were the rule. The testoon, which appeared in 1544, was renamed the
shilling, in 1548, at a reduced fineness. Throughout Edward VI's reign, the
desire to restore the coinage yielded to the needs of the Exchequer to retain
base coinage and, in fact, at times, a silver coinage was issued even more
base than in Henry's reign. Not infrequently, coins of the same
denomination were released with a different fineness and weight from
various mints at the same time; occasionally this occurred even within the
same mint.

Mary restored the use of standard gold for gold coinage but was
content to continue silver coinage at a base level of 0.25 fineness. In
December, 1554, after her marriage to Philip of Spain, new shilling and half-
shilling pieces were released on which appeared facing portraits reminiscent
of the Spanish coinage of Ferdinand and Isabella. Mary's portrait alone
appears on her other issues.

When Elizabeth acceded to the throne, much of the base coinage of
Edward VI still remained in circulation. Initially it was permitted to remain
current at reduced values, but the two worst classes of testoons were
countermarked to circulate at values of 4 1/2d and 2 1/4d. Other silver
pieces were derated and finally demonetized in 1561. Elizabeth's first
coinage continued the use of standard gold and 0.81 fineness silver but
introduced pieces of 20s, 10s, 5s and 2s 6d of gold of 0.833 fineness. Later
the shilling was suspended but silver pieces of 6d, 3d, 1 1/2d and 4d were
issued. These were differentiated from the groat, 2d and penny by
incorporation of a rose behind the queen's head. This marked the first use
of a three half-penny and three farthing denomination which facilitated
making change for common farthing and half-penny purchases. Elizabeth
authorized six distinct issues of coinage in response to economic pressures
and general lack of confidence in the currency. Scarcity of small change led
to local attempts at tokens of lead or tin by shopkeepers. Patterns for copper
half pence and farthings were struck but such issues did not become
definitive. One further innovation was the attempted introduction of the
screw press, but this was vigorously opposed by mint personnel.

Under James I, inclusion of the Scottish and Irish arms in the reverse
design marked the union of Scotland and Ireland with England. New gold
coins appeared, a unite of 20s together with its half and quarter, a thistle
crown of 4s and the crown of 5s called the British crown. James authorized
copper farthings in 1613 which continued through several series until 1636
in order to discourage the use of merchant tokens. Acceptance of copper
farthings was not forced but they were sold with a 10 percent onus in twenty
shilling lots and were similarly redeemed.

Unlike his predecessors, Charles I did not avail himself of base coinage
to resolve his financial difficulties in a reign already replete with even more
serious problems. The numismatic cord of Charles' reign reflects the depth
of civil unrest which tore apart the government. After February, 1642,
Parliament controlled the Tower mint while the king was forced to establish
mints in provincial towns and produce emergency coinage in towns that, on
and off, were besieged by Parliamentary forces. Numismatically, this is one
of the most interesting reigns for the variety of mints and mint marks used,
for the high level of artistic design incorporated into the currency, for the
successful introduction of machine-made coins and for the originality in
obtaining metal for emergency coinage. The denominations, for the most
part remained the same as they had been. In addition to extending the use
of copper and brass farthings for economic reasons, the artistic taste of
Charles supported Nicholas Briot in overturning mint hostility to introducing
the screw mill. Under Briot's control of mint operations, the question of
debasing the coinage was strongly opposed and the use of privy marks
extensively employed. Mints were created in York, Aberystwyth (to utilize
Welsh silver), Shrewsbury, Oxford and Bristol; these opened and closed as
a function of which forces (Royal or Parliamentary) controlled the region.
At least between 1638 and 1642, Welsh silver appeared in pieces of 2s, 1s,
6d, 4d, 3d, 2d, 1d and 1/2d. Obverses with the equestrian and profile
portrait types were most common. The introduction at Schrewsbury of the
famous Declaration reverse which displays the abbreviated form of the
declaration (made at Wellington in Shropshire on September, 1642)
RELIGIO PROTESTANTIUM, LEGES ANGLIAE, LIBERTAS
PARLIAMENTI "(to defend) the Protestant religion, the laws of England, the
rights of Parliament" soon spread to other mints. During its short life, the
mint at Shrewsbury produced pound and half-pound silver pieces to
supplement the shortage of gold coins. At least one gold coin, however, also
was struck before removal of its mint to Oxford: a triple unite (1642). The
unite was struck only at Oxford. College plate provided the bulk of the
bullion available for coins at Oxford while plate supplied by the king's
supporters provided the bullion at York and plate supplied by Lord Robartes
served at Truro mint. In 1645, antique plate of the city of Chester, to the
value of  100, was converted into coin for the defense of the city and
payment of debts. During the Civil War, an emergency coinage was struck
in the towns of Carlisle, Colchester, Newark, Pontefract and Scarborough
while they were under siege by the forces of Parliament. These siege pieces
were cut out of plate and either marked with a value according to their
weight or were cut to a certain size for the required value.

MODERN BASE COINAGE

The need for obtaining general acceptance of their currency caused
Parliament to retain the portrait and legends of the king on the coins until his
death. In 1649, coins were struck in the name of the Commonwealth and,
for the first time, with inscriptions in English. The coins, except for the
half-penny, were of uniform style with a shield containing the cross of St.
George on the obverse and two shields with the crosses of St. George and St.
Andrew on the reverse. With the restoration of the monarchy under Charles
II, the coins of the Commonwealth were demonetized.

The problem of small change had never been resolved since the time
of cut half and quarter pennies. In the sixteenth century, shopkeepers
provided a temporary solution by issuing lead tokens. Despite attempts by
James I and Charles I to provide farthings through private monopoly, trade
tokens again appeared in the third quarter of the seventeenth century (ca.
1648-1672), in the eighteenth century (1787-1796) and in the nineteenth
century (primarily 1810-1814). These tokens are the basis of another
chapter in this book and further discussion will be deferred to that chapter.

One other approach saw limited use as a means of relieving the small
change shortage. The earliest English jetons appeared towards the end of the
thirteenth century. Their design was based on the sterling pence of Edward
I. In fact, many were struck from dies using the same punches as were used
to make the coin dies. In general, the jetons of Edward I and 11 are of small
size; those of Edward III and Richard II are larger. They were made of silver
or brass and were completely pierced or indented in the center as a
precaution against their use as coins of the realm. Contemporary jetons
were struck which were crude copies of the official mint issues. In spite of
the prohibition against their use as trade coinage, it is probable that they, in
fact, saw temporary use as small change.

Charles II issued a farthing and half-penny of copper with tender
limited to payments under six pence. At the end of his reign, farthings of tin
were released. These bore a copper plug at their centers to foil forgers but
to no avail; James II and William III continued to strike similar pieces until
1693 when copper alone was used again. The coinage continued through the
reigns of George I and II at varying weights and stopped completely with
George III. For the 130 years between Charles II and George III (1670-
1800), the penny generally appeared only as part of an annual Maundy
coinage. Some undated types might have been used for regular trade while
the dated types generally were for presentation. In 1797 Matthew Boulton
was contracted for a coinage of copper including the "cartwheel" two pence
(two ounces of copper), a similar penny (41mm; one ounce) and, in 1799,
a proportionate half-penny. These were considered too clumsy for ordinary
use and were replaced by pieces of reduced size (31mm) and weight
(including a farthing) in 1806 and 1807. Half farthings prepared for use in
Ceylon were released in 1842 they never came into general use in England.

Silver continued to drain from the country since metal coined at 5s 2d
an ounce was worth 5s 3 1/2d for export. The extreme shortage insured that
no silver coinage was released for almost 30 years beginning at the end of
the eighteenth century. Gold coinage continued with some regularity; a gold
third guinea was introduced in 1797 to provide smaller coin and a quarter
guinea was struck in 1718 and 1762. Spanish 8 real pieces appropriately
marked were circulated in 1797 at 4s 9d and the Bank of England struck an
1804 silver token dollar and other smaller pieces in 1811-1816 to fill the
gap.

In 1816, with silver at 5s 1 1/2d (below the mint price), the currency
was put on the basis of the gold standard and silver and gold coinage became
subsidiary money without intrinsic value (being coined at 5s 6d). This
established the basis of the modern currency. An early experiment with
decimalization (1849) brought the silver florin (1/10 pound) into circulation.
An extensive silver coinage continued through the reign of Victoria to that
of George VI's second coinage (1942-1947) when all denominations were
converted to coins of nickel-brass or cupro-nickel of equivalent weight. In
1967, with the conversion to the decimal system, new coinage (including a
penny of 19 mm) of 50, 25, 10, 5, 2, 1 and 1/2 pence was released into
general circulation; the 1/2 pence was discontinued in 1984. The "round"
pound coin appeared in 1981. Only the sovereign remains a commercial
coin of gold.

INDUSTRIALIZATION

Shift from Agriculture to Industry

Industrialization did not come to England in a single burst of
mechanization, but when it did begin, the monetary output (coinage) did not
keep pace in providing that type of coinage needed to meet the new
demands.

As early as the 13th century, the economic pattern was already
beginning to shift from one built on agriculture and enforced labor services
to one which included light manufacturing and wage labor. Perhaps as a
result of population growth, perhaps for other reasons, land was in great
demand. Land which had earlier been freely rented now returned to direct
management by the gentry in order to secure the greatest returns. Operating
costs were high. With the shift to wage labor (in the early 13th century, half
the adult population of England was working full-time or part-time for
wages) and the high demand for land, the gentry raised their rental fees or
sold off small parcels at high fees. The 'ripple effect' permeated other
economic endeavours resulting in an inflation considered the most alarming
of the whole middle ages.

Wheat was exported and wool became such an overwhelmingly
important national export that half the country's wealth derived from it.
Flanders had a highly developed clothmaking industry dependent upon
English wool. Sheep farming in England grew rapidly to accommodate this
foreign industry as did the Venetian control of wool shipments. Thus more
profits left the country than remained within. To reverse this, wool was
made into cloth in England rather than exported as a raw material. This led
to the industrial revolution of the 13th century. Fulling mills operated by
water power developed across the countryside and looming mills followed.
Parallel to this intrial development, there was increased interest in newer
technology in agriculture. Changes in cropping, patterns of field rotation
and methods of fertilization brought increased mechanization to agriculture -
and increased profits. But wool dominated the industrialization of England;
by the 16th century, textiles had become one of the pillars of the
commonwealth. They were the main source of livelihood in many parts of
England where there was a reserve of labor and cloth could be made
cheaply. The overseas demand for fabric brought a further boom that
generated rapid economic growth. Invention of the knitting frame spurred
the hosiery industry and new industries such as paper making, printing, and
the manufacture of gun powder sparked further growth. The introduction of
the blast furnace was a significant technical development and the demand for
products made of iron, lead or copper was limited only by the availability of
timber for charcoal making. While some of the older corporation towns like
Coventry, Winchester and Lincoln declined, other unincorporated towns
such as Birmingham, York and Norwich saw new building and paving of
road systems.

ROYAL TREASURY

Coins originally were minted in the major centers of the heptarchic
kings from closely supervised dies bearing the moneyer's name. Later with
the conversion of the Anglo-Saxon kingdoms into the commercial kingdom
of England, mints were established in more remote parts of the country,
away from the central authority. This was the direct result of the rising
importance of the shire and its local court representing the king and the
increased participation of the burghers in the function of the government.
William the conqueror and William II Rufus left the system much as it had
been before the conquest. Henry I's reign (1100- 1135) marked the coming
of age of royal administration and, with this, a growing demand for funds.
Henry seized the royal treasury on the death of William II. He claimed the
crown quickly as a brother of Rufus, frustrating any attempts of Rufus' eldest
son to succession. Succession as a right of primogeniture was not yet the
rule, but this action did set the pattern for the internecine conflicts to come.
Under these conditions, moneyers were provided with the opportunity for
enriching themselves by coining below the prescribed standards of fineness.
Decrees dictating a single coinage over all the king's dominion, minted only
from marketing towns and threats of mutilation did little to alleviated the
regular need for coinage reform and rapid turnover of emissions.

At Henry's death, the treasury was full and the governmental
machinery was in good working order. However, within two years after
assuming the crown, Stephan squandered Henry's treasury on lavish bribes
and wages for mercenaries needed for his wars with the barons and for the
dispute over succession with his cousin, Matilda. When Henry II succeeded
Stephan, he found the currency again to be in a confusing and degenerate
state. There was an increase in the amount of money in circulation because
of the growth of commerce. Farms began to produce a profit rather than
only provide subsistence. England was tightly administered under Henry
and, for the first time, an annual income tax was put into effect. The
treasury was guaranteed, but Ireland and France commanded a large part of
these funds.

On returning from his crusade, Richard I was captured by the duke of
Austria and was turned over to Henry VI of the Holy Roman Empire. A
ransom of £ 100 000 (24 million pence) was paid for his release in 1194,
largely taken from the Jews of England. As a result, the 'short cross' issue
became popular outside of England, particularly in the low countries and the
lower Rhine. This might have been the result of the active trade-domination
England came to exert but more likely it was because of the number of
pence which poured into the area as part of the ransom.

John's reign (1199-1216) was marked by three great conflicts: with the
French monarchy, with the papacy and with the English barons. He
inherited from Richard an effective but expensive and demanding military
policy in France which led him to establish a British navy. With an
exhausted treasury, he increased taxes ruthlessly. The commercial climate
was such that much of the tax increase was absorbed but much of the
revenue was dependent on loans from the barons.

Tin mining became an important industry in England during Henry
III's reign (1216-1272). This contributed to the fact that the penny again fell
from its prescribed standard. Henry's incessant need for funds beyond the
customary royal revenues led to constant appeals for loans from the barons -
generally given, but with more and more demands for a voice in the control
of the government. Basically, the financial position of the monarchy was
sound, but no instrument existed for raising funds to meet extraordinary
expenses corresponding to the national debt today. Instead, the king was
forced to borrow at short term and at high interest rates from groups or
individuals - or to seek baronal permission to levy special taxes. At times,
Henry pawned his jewels and, occasionally, even sold them. He granted
special rights to guilds in exchange for loans. He frequently borrowed from
the Jews and then threatened them with imprisonment unless they 'donated'
into the royal treasury and forgave the interest payments.

Henry maintained a great household swelled with foreign guests. He
held big ceremonial feasts and was lavish in his suport of the arts. His
differences with the papacy led to frequent and expensive suits in Rome. In
1254, Henry attempted to secure the Sicilian crown for his son, Edmund.
In so doing, he had to assume the enormous debt the papacy had incurred
and he found himself committed to a ruinously expensive and fruitless
venture. Eventually he lost the crown to a higher bidder.

Until Edward I ascended the throne of England, the royal prerogative
as to sources of revenue and reasons for expenditures remained solely with
the king. He levied whatever taxes he wanted, confiscated properties and
then charged whatever rents he wished on these same properties. Aside
from the expense of running a 'household', royal expenditures for the most
part went to support wars of nationalism, wars for foreign conquest and
later, civil wars.

The struggles of Henry III's reign and the far-flung wars of Edward I
(1272-1307) contributed to the evolution of the supreme achievement of the
thirteenth century in England, a parliament. The rise of parliament as a
response to the demands of the baron magnates and of the peasants for a
voice in the government, removed these prerogatives from the king and
forced him to turn more and more to the barons for loans and to parliament
for the right to levy taxes. Eventually even the right to declare war was
removed from the king and it became a function of parliament. Thus
economic considerations were at least ne major reason for the rise of the
institution of parliament and for the decline in independence and power of
the king. The constant demand of the royalty for money to finance war
against the Irish, the Scots, and the French, led the national expense base to
rise rapidly. Where Richard's average income had been £ 100 000, Henry's
expenses exceeded £ 140 000 per annum. A king could not longer live
solely on the royal income.

Edward's desperate need for money was an important motive for
summoning numerous parliaments which had not yet assumed their present
status. He asked for and got the right to an annual percentage of the value
of his subject's properties and rents; he taxed the clergy; he collected heavy
duties from the Italian merchants who dominated the English wool trade.
But in the long run, where other kings had depended on the English Jewry
for loans, in 1290, Edward expelled the Jews from England in order to gain
whatever property they had. Yet for all this ingenuity, he failed to meet his
overall needs and left the government again in debt. As an example,
between 1294-1298, Edward's military expenses ran to £ 730 000 while the
crown's ordinary income was only £ 150 000.

Edward II (1307-1327) inherited an over-ambitious national policy, a
restive nobility and, what had become almost the standard, a debt-ridden
treasury. Between his Scottish campaigns, his attentions were devoted to
borrowing money. In 1311, as a concession to another bid for special taxes,
parliament demanded the right of consultation on matters of war. Edward
III (1327-1377) managed to avoid civil conflict with the barons and peasants.
Though his participation in the Hundred Years War (1338-1453) against
France imposed a considerable strain on English resources, he managed to
create an artificial demand for wool and benefitted from the heavy duties he
imposed on the wool merchants. A temporary treaty with France, after the
capture of the French king, led to a £ 500 000 ransom which eased the
financial crisis for Edward. Ultimately, his staggering war expenses made
him even more dependent upon parliament. This led to the appearance of
gold coins (other than the 20d gold 'penny' experiment) for the first time.
Richard II (1377-1399) attempted to reverse the decline of royal power. The
Black Death created a shortage of labor, a declining market, but rising
wages. Land revenues also declined and parliament (the Barons) tried to
shift their own tax burden to the burghers. The Peasant Revolt of 1381 led
to a ceiling on rents - not to exceed four pence per acre. Richard's marriage
to Isabella, daughter of the French king, brought a dowry of 800 000 francs
and an improvement in his financial condition, reducing his dependence on
parliament. Coins of this period make reference to his French possessions.
The temporary alliance with France provided freedom from war expenses
and further reduced his dependence on parliament. As with Edward II,
Richard was deposed as king by parliament - Edward because he was too
weak, Richard because he was too strong.

The Plague had a great impact on prices. Between 1300 and 1350,
revenues of the lord of the manor at Steeple Barton dropped from 54s to 6s
9p. In the same period, however, the barons had the real power and an
income of £ 300-5000 with an average of £ 865. Following the Grey Death
of 1361 (=100), food prices in 1410 were 84 and wages 119; by 1490, these
indices were 94 and 105, respectively.

For a short time under Edward IV (1471-1483), with little interest in
expanding English claims in France, England prospered. Edward V ruled
barely long enough to have produced his own coinage and coinage of his
successor, Richard III (1483-1485) is almost as rare. Between 1500-1540
(Henry VII), prices of food doubled and between 1540 and 1560, they
doubled again. In the 15th century, Europe's scarcity of precious metals
began to abate. New silver mines were found in central Europe (leading to
the appearance of a new great coinage - the Joachimsthaler), new sources
of gold appeared in west Africa and, in 1545, the Spanish stumbled onto the
silver mines of Bolivia and the mountain of silver at Potosi. In 1572, silver
production was six times that of 1500. This drove down the value of money,
reduced the purchasing power of the traditional coinage (the penny and
groat) and forced up the cost of services and supplies. Land in Yorkshire
valued at 4p an acre in the 15th century, rose to 9p in 1548, 2s 4p in 1621
and to 22s 7p in 1930. Nevertheless, by having inherited the wealth of
Edward IV and by arranging for parliamentary acts which deprived some of
the wealthiest men of their property, the financial recovery of the crown
began. Henry VII gave up English claims to all French territory in exchange
for a monetary tribute. This provided the wherewithal for an extensive
coinage including a gold pound coin called the sovereign'. When he died,
he bequeathed to his son something unusual in English history, a safe throne,
a full treasury and a prosperous realm.

The callous royal policy of Henry VIII coupled with personal ambitions
of Thomas Wolsey led to empty coffers again in 1522 and the need to turn
to parliament for loans. Wolsey (rather than Henry VIII) led England into
new French and Scottish wars while his personal support for the popes in
their conflicts with the Holy Roman Empire, France, Italy and England
produced a latent hatred for Wolsey with a decline in support of the papacy
in England. Wolsey undertook a recoinage in 1526 with coins of reduced
silver content. This was the first serious debasement of coinage since the
conquest. Though this debasement brought English 'good' coinage in line
with the 'bad' money of the continent, it also set a precedence for the series
of further debasements between 1544 and 1551, ultimately yielding a
coinage containing only one-sixth of the silver of what it had been under
Henry VII. This produced the so-called 'red-nose' pennies after slight wear.
A rise in prices was the inevitable result of debasement. In 1551, a new
coinage was planned at a restored silver content but this was not achieved
until 1560 and completed under Elizabeth. Confidence of the nation was
restored but prices continued to advance under the flood of a silver and gold
money supply. Compared with a value of 865 in the 1300's, a peer was
now worth £20-100 000 in land and capital assets. Governmental clerks,
merchants and lawyers earned £50 per year and the common person
survived on an £2 10s income. By Charles I (1683), a gentleman could
expect £450 per year, a tradesman £45, a laboring man £15 and a soldier £14.
The average income in England was £7 18s, in Holland £8 1s 4d and in
France £6, but the value of trade in England was £ 11 500 000.

REVENUE

As each new monarch came to power, he used the penny to pay off
royal debts and obligations and to provide funding for the next war.
Beginning with the reform of Edgar (978), existing silver coinage was
withdrawn from circulation at irregular intervals for replacement by a new
coinage, at a fee from the moneyers. This evolved into a profitable system;
new issues appeared every three to seven years and continued even into the
copper coinage after 1797, though the reason for replacement gradually
became one more based on the changing appearance of the monarch than on
economic needs. Once the penny became established over hundreds of
years, it remained a sufficient coinage to cover the economic needs of those
who required a monetary unit to supplement direct barter. In the 11th
century, the economy based on barter gave way to a money economy in the
12th and 13th centuries.

The change of coin types brought with it an economic advantage to the
king as well as to the moneyer and local officials (e.g., the shire's rief -
sheriff). Since clipping of coins and wear was inevitable, replacement of old
coins by new was on a weight basis.

Debasement of the metal in new issues afforded another source of
regal income, while control over the number of coins struck from a pound
of silver provided yet another source of revenue. The moneyer received a
percentage of the newly struck coins as his fee and the rief or other local
official was paid for his role as exchanger or collector of the old coinage.
Trade was channelled through the borough where royal supervisors could
maintain strong control. As a result, each borough probably had its own
royal mint; by the Norman conquest, perhaps 100 mints blanketed the land.
It should be mentioned that coin style and design was dictated by the central
mint authority to the extent that die pairs were distributed to the local
moneyers by that authority. Nevertheless, each reverse bore the name of the
moneyer and mint site to insure conformance to the edicts of the crown.

In addition to income provided from coining, the late Anglo-Saxon
monarchies developed many sources of revenue to sustain their intra-
heptarchic wars and to purchase security from Viking marauders. Desmesne
taxes - a tax on each farm, town or district in royal lands - were the chief
source of revenue. A portion of the desmesne tax was required in coin
rather than in kind. In addition, there was a kingdom-wide land tax. In 991,
Ethelred (the Unready) imposed still another tax, the Danegeld, to raise
money for protection against the Danes.

RESTRICTIONS ON MONEYERS

As has been noted earlier, clipping, debasement and counterfeiting
were a bane to the royal treasury. Undoubtedly a good deal of the clipping
occurred at the hands of the merchant or of the general public in an attempt
to glean an edge over their constant tax burden. The products of the
moneyers also caused great public and royal consternation as debasement
and counterfeiting clearly fell into their realm. While pennies in circulation
often were well-worn, light and/or debased or clipped, many were cut into
smaller units for use as small change. With judicious chopping, the moneyer
might gain a grain or two of extra profit as he prepared cut half- and quarter-
pennies. Henry authorized round half-pennies but only one specimen has
survived. Merchants generally refused to accept suspicious coinage or coins
nicked to detect base metal cores in counterfeits. It was not unusual to go
to market with a pound of pence (240) and find no more than a dozen being
acceptable for trade. The Proclamation of 1108 decreed that all genuine
pennies and half-pennies could not be refused and required that all newly
produced pennies be nicked or notched to show that they did not contain
copper cores. Many coins minted between 1108 and 1124 are cut as much
as one-third way across the flan.

New laws restricted the range of operations of the individual
moneyers. The moneyer no longer could legally transact money exchange
outside of his own shire and, even within the shire, could only exchange new
money for silver before two witnesses. Thus any moneyer issuing light or
debased pennies easily could be detected within his own shire by his
signature on the coin. Interestingly, however, it was not illegal to create
false dies under another moneyer's name. The bungled reverse inscriptions,
completely illegible pennies and products of altered official dies suggests
that this possibility did not escape the moneyer's fancy. In December, 1124,
the situation was so critical that Henry ordered all moneyers to stand trial in
Winchester for their misdeeds. Those found guilty of issuing light or
debased money had their right hand amputated. From an examination of the
list of moneyers at each mint before and after the assize, it can be concluded
that perhaps half the moneyers suffered mutilation. The toll of melting
down the light, clipped and debased coinage was so heavy that a money
scarcity existed in the year after the trial.

The plethora of penny styles of variable size and metallic purity
required quick reform and Henry accomplished this by abolishing the system
of frequent rotation of coin types. He fixed on a single portrait type for his
first issue of 1157 and continued that type for 22 years with only variations
in detail. These were badly struck and often illegible. In 1180, in
conjunction with his Irish campaign, a coin of better workmanship and
artistic merit appeared; that type, the 'short cross' coinage, continued for
more than 60 years, through the Angevin reign of Henry and into that of his
two sons, Richard and John, and his grandson, Henry III.

There was some recoinage under John in 1205 because existing coins
were in poor condition and not accepted in the Dutch trade. John decreed
that no one should accept clipped money less than seven-eights of its proper
weight - money weighing less should be seized and taken into the king's
personal treasury. Only moneyers, the king's and those of the Archbishop
of Canterbury, were allowed to exchange new money for old and they were
to charge no more than 6d for exchange in each pound's worth of good
pence. Systematic clipping existed and many received only bullion value for
the damaged pieces they turned in. Though a number of reforms were
instituted, they produced no significant changes in the action and function
of the moneyers. In 1279-1280, moneyers were replaced by a central mint
authority and privy marks replaced the moneyer's name on the coinage.

A TEST OF OVERVALUATION OF
ANGLO-SAXON COINAGE

In the change from barter to agriculturization to the industrial revolution,
England was, in effect, becoming capitalistic. With the rise in importance
of money, bullion itself became a commodity, as the value of precious
metals became greater. Gresham's Law, which holds that bad money
drives good money out of circulation, is a specific application of a more
general principle first postulated by Copernicus in an essay on coinage.
The question leading to these principles dealt with the ability of coins
with different weights (even of different metals) but of the same nominal
value to co-exist on the open market.

If the value of the coin is completely dependent on its metal content,
varying coin weight is not likely. Thus, under such a system, coins of a
fixed (stated) value cannot vary in weight and coins which vary in weight
cannot be of the same fixed value. If, on the other hand, variations in weight
are permitted to exist (though they do not have to occur), the metal content
of the coin does not constitute its value as a coin. Such coinage must
include a minting charge which gives it a trade value greater than its metallic
value. When such money is worn and is turned in for new money, the law
of diminishing returns must apply. Under such a system, the coin producer
(government) must have a minting monopoly and should effectively control
trade so that payment for goods is made with coins which have been
declared legal.

The exchange of bullion for coins is at a certain rate of exchange but
the weight of coins received is less than the weight of bullion given in
payment for those coins. Thus the official price for bullion becomes
established as the normal price on the open market. The difference between
the real price of the bullion and the official price represents the overvaluation
of the coins produced from that bullion.

The fluctuations in the weight and fineness of the English penny had
interesting ramifications on the overall English economic system. Within
limits, light coinage was acceptable by the crown at face value. Thus
individuals within the land weren't affected by the variations in weight.
Continental trade, however, was tied to the weight of the coin, that is, to its
bullion value. Thus the use of light or devalued coinage for payment
discouraged import of goods into England, encouraged export and thereby
created a favorable balance of trade and a net flow of silver into the country.
This advantage became particularly obvious during the conversion of
England into a great wool (later, cloth) exporter to the Continent and in the
establishment of the Industrial Revolution in England centuries later.
Nevertheless, a counter to this simplistic view suggests that the Anglo-Saxon
penny might in fact have been overvalued, accounting for the ready
acceptance of light coinage abroad. Even through the lengthy period of
payment of danegeld, a reasonably healthy economy was maintained. A
study of the accumulation of wealth in England during the 10th century
revealed an enormous coinage under Aethelred II. Continuing the tribute
payments imposed by the Danes earlier, Aethelred paid out £ 155 000 of
silver in six installments. For this he needed a large coinage. Analysis
suggests his coinage was of low fineness relative to the typical Anglo-Saxon
standard. Yet this enormous output of coinage appears to have been
acceptable to the Scandanavians whose standard of coinage was lower than
that of English coins.

The concept of an overvalued English penny is further supported by
the frequent need during the rise of English industry to produce a base
coinage on par with the coinage of Flanders in order to prevent the drain of
bullion from England to the continent. This also explains why today one
finds hoards of coins buried rather than single pieces.

The question remains yet as to how far a coinage may be debased (or
devalued) before a non-uniform metallic standard could no longer exist, i.e.,
before Gresham's Law would apply.

When a state mints coins of only a single weight standard, if the charge
made by the state for minting coins remains unchanged, the uniform metallic
content of these coins can be lowered by the amount of that charge without
consequence. Only when the fall in metallic value of the coin exceeds the
charge will it pay to melt down the original coins. Let us consider the state
in a time of sudden need, e.g. excessive outpayments (Danegeld) or scarcity
of bullion (industrialization). The state produces new coinage at a lower
weight standard. Prior to the debasement, anyone giving bullion to the mint
for conversion to coinage would receive a number of coins equivalent to the
mint value of the bullion. This is less than the market value of the bullion
by the charge for the minting operation. Under the new reduced weight
standard, if the minting charge remains unchanged, the same quantity of
bullion would be returned but each coin would weigh less; hence more coins
would be received in proportion to the degree of debasement. Actually three
cases exist depending upon whether the degree of debasement is greater
than, less than or equal to the charge for minting. In case 1, the number of
coins received is less than originally, in case 2, the number of coins is more
than originally and, in case 3, the number of coins is the same as originally.
If one receives the same number of coins, but each weighs less, he does not
gain by handing in the bullion (or old coins). Not until the degree of
debasement is less than the minting charge would he gain, because he then
would get more coins than originally. The limit is reached when the degree
of debasement (i.e. debasement charge) is equal to the minting charge. As
long as the price relation between bullion and coined metal (open-market
price: official (mint) price) remains constant, the weight of the coin can be
reduced and coinage of two weight standards related by that ratio can co-
exist.

Since almost every English monarch until the Commonwealth was in
dire need of revenue, minting operations generally were very high relative
to the cost of bullion; this resulted in a reduced value of coinage being
returned to the person bringing in bullion to the mint. Thus old (good) coins
were hoarded and new (bad) money was used to pay expenses, affirming the
general statement of Gresham's Law.

GENERAL BIBLIOGRAPHY

BERRY, GEORGE

Medieval English Jetons,
Spink and Sons Ltd.,
London, 1974.

BERTIL, H. and A. PETERSSON

Anglo-Saxon Currency,
Gleersips,
Lund, 1967.

BRANDEL, FERNAND

The Wheels of Commerce: Civilization and
Capitalism in the 15th-18th Century,
Volume II, Harper and Row, New
York, 1982.

BRIGGS, ASA

A Social History of England,
The Viking Press, New York,
1984.

BROOKE, GEORGE C

English Coins from the Seventh Century to the
Present Day,
Spink and Son Ltd., London, 1976.

OMAN, SIR C.W.C.

The Coinage of England,
Clarendon Press, Oxford,
1931.

PECK, C. WILSON

English Copper, Tin and Bronze Coins in the British
Museum, 1558-1958,
The Trustees of the British Museum, London,
1960.

SEABY, PETER and P. FRANK PURVEY

Coins of England and the
United Kingdom,
Revised 16th Edition, Seaby, London, 1978.

NOTE: Photography courtesy of Art Needleman and Allan Davisson.

ILLUSTRATIONS

1. Silver penny without portrait (c.784-c.787). Legend OFFA REX

2. Bronze sceat of ECGFRITH, king of Northumbria. Small crosses.

3. Silver penny of BURGRED (852-874), moneyer's name on reverse.

4. Silver penny of HAROLD II (1066), PAX on reverse.

5. Silver penny with facing bust of HENRY II (1154-1189).

6. Silver groat of EDWARD IV (1471-1483).

7. Silver groat of HENRY VIII (1509-26) showing bust of Henry VII.

8. Silver groat of HENRY VIII (1526-55).

9. Silver shilling of PHILIP AND MARY (1554-58) with full titles.

10. Silver penny of CHARLES I (1625-1649) with rose obv. and rev.

11. Silver six pence of the COMMONWEALTH (1649-1660).

12. Gold angel of EDWARD IV (1471-1483) showing St. Michael on the
obverse and ship on the reverse.